Buying a new home can be an exciting experience as well as nerve wracking for first time buyers. The process of finding the ideal home can take several weeks or even months and once that part is done, there is the paperwork phase and the closing.
In the case of closing, this is one area where things can go wrong and the last thing a buyer wants is to run into trouble when they’re already so close to becoming a homeowner. For example, a lender may require an independent appraisal to ensure a property is worth the amount the buyer agreed to pay the seller. Should the appraisal be valued at a price lower than sale price, the buyer may be forced to shell out the cash to cover whatever amount is not being financed by the lender.
Another thing to keep in mind is insurance. If the home is located in an area that’s considered disaster prone, the lender may also require that the buyer pay for high risk insurance. On the other hand, if the buyer is looking to purchase a home that’s in significant disrepair or has a number of claims, they may not be able to get insurance at all.
Receiving loan pre-approval doesn’t necessarily mean clear sailing either. Unforeseen circumstances such as suddenly becoming unemployed, making a major purchase or other circumstances that play a role in a buyer’s ability to pay their mortgage could mean a change in loan terms or being denied altogether.
This real estate and financial update is brought to you by FreeValues.com, the number one provider of free home values on the web. We provide free house values as well as useful information for sellers.